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In India, gift-giving drives drugmakers' marketing

Reuters, Mumbai
SALES representatives for Abbott Laboratories' Indian subsidiaries know what it takes to get a doctor to prescribe the drugs they market: a coffee maker, perhaps, or some cookware, or maybe a vacuum cleaner.
These are among the many gifts for doctors listed in an Abbott sales-strategy guide for the second quarter of 2011, a copy of which was reviewed by Reuters. As laid out explicidy in the guide, doctors who pledge to prescribe Abbott's branded drugs, or who've already prescribed certain amounts, can expect some of these items in return.
Consider the guide's entry for Nupod, an Abbott antibiotic generically known as cefpodoxime. It lists a medical textbook, a mosquito repellant and a coffee maker as incentives for doctors.
In interviews with Reuters, dozens of doctors, drug reps and other healthcare insiders said domestic and multinational drug makers routinely shower Indian doctors with gifts, posh junkets abroad, and cash payments disguised as consultancy or other types of fees.
"Indian CRM," or customer-relationship management, is what industry insiders call this system of inducements. None of the doctors or reps who described their participation in this trade would speak on the record. Under Indian law, doctors are prohibited from accepting cash, gifts or travel from drug companies. Still, enforcement is rare, and drug makers may lavish gifts on doctors with impunity, though their home countries may punish the practice.
In a country where doctors often make less than $10,000 a year, it can be an effective strategy.
"Somebody is doing something for you," says a Delhi-based cardiologist. "Obviously you will want to return the favour." He says he prescribes more drugs from companies that provide gifts and send him on paid vacations to Thailand, Hong Kong and elsewhere. One of those companies, he says, is the Indiabased Ranbaxy unit of Japan's Daiichi Sankyo Co.
"We do not sponsor vacations for doctors," a Ranbaxy spokesperson said. "We are viewed as a scientifically and academically orientated company and our promotional activities are built around academics and science."
In response to questions from Reuters, Chicagobased Abbott said that it complies with local laws and regulations in India. It added that company policy forbids employees to "offer or give a sponsorship, gift, meal or entertainment in exchange for an explicit or implicit agreement that Abbott Products will be used, purchased, ordered, recommended or prescribed or that Abbott or any Abbott products will receive any favourable treatment."
The Indian market is particularly vulnerable to corruption because of the intense competition here. Until 2005, India flouted drug patents, refusing to rein in domestic copycats of Big Pharma's blockbusters. Brands proliferated. Today, an Indian doctor can choose from among 224 registered brands of the cholesterol-lowering drug atorvastatin, sold by Pfizer Inc
as Lipitor in the US and elsewhere.
Foreign companies that want a piece of this crowded market "have to adapt, or they are not going to survive," says an executive with Biocon, a leading Indian biotech company. The executive says Biocon routinely gives doctors iPads, iPods, mobile phones, "you name it.”
A Biocon spokesperson said the executive's statements are "incorrect and absolutely untrue" and added that the company operates" in strict compliance" with the law. Public health experts and some Indian doctors say that as a result of drug companies' tactics, drugs are dan -gerously overprescribed and expensive brands are prescribed instead of cheap ones. That can be devastating for patients — physically and financially — in a country where health care is mostly private and unsubsidised and 400 million people live on less than $1.25 a day.
At the Amrita Clinic, a private practice in Pune, Maharashtra State, physician Vinay Kulkarni says he refuses to accept gifts from reps, in part because he believes drug makers overcharge fortheir products to recoup marketing expenses. "Ultimately," he says, "everything is being paid by the patient."
As Big Pharma has pushed into emerging markets like India in recent years, companies have been running into trouble with their home-market overseers. Many of the world's top drug makers have warned in recent regulatory filings of potential costs related to charges of corruption in foreign markets.
Last year, Johnson & Johnson agreed to pay $70 mil-
lion to settle US charges that it paid bribes and kick-backs to win business in Greece, Iraq, Poland and Romania. Pfizer Inc recently agreed to pay $60.2 million to settle a US government probe of the drug maker's use of illegal payments to win business overseas, including gifts such as cellphones and tea sets to doctors in China who prescribed the company's products.
Abbott became the No. 1 pharmaceuticals company in India in 2010, when it paid $3.7 billion for the branded generics business of Mumbai-based Piramal Healthcare. Its thousands-strong Indian sales force has helped buoy the parent, as sales in emerging markets rose 23 percent to $2.59 billion in the second quarter of 2011 -- more than twice Abbott’s global growth rate.
Reps from Abbott True Care, Abbott Healthcare and Abbott Primary Care -- all formerly part of Piramal and now subsidiaries of Abbott — say sales plans are revealed to them at “cyclical sales meetings" every three or four months. These meetings, they say, sometimes include studying printed strategy guides like the one for second-quarter 2011 that Reuters reviewed.
That guide offers no clarity on why particular gifts are paired with particular drugs. None of the items that come with Nupod, the antibiotic, go to doctors who prescribe Pantagon IT. That drug - a combination of itopride, for bloating and indigestion, and the antacid pantoprazole -- comes with a stapler, a set of six glasses and a jar from Luminarc, and a Forbes Trendy Nano vacuum cleaner.